Riskified Business Model Canvas

Riskified's strategic alliance with cloud infrastructure giants like Amazon Web Services (AWS), where it holds AWS Accelerate Partner status, is a cornerstone of its operational strategy. This partnership is crucial for providing reliable and scalable fraud prevention services.

By leveraging AWS's robust cloud capabilities, Riskified ensures its AI-powered solutions can handle massive transaction volumes with high availability and security. This allows them to serve a global e-commerce customer base effectively.

Furthermore, Riskified's presence on the AWS Marketplace simplifies procurement and integration for merchants, accelerating the adoption of advanced fraud detection tools. This accessibility is key to expanding their market reach.

Riskified's key partnerships with e-commerce platforms like Shopify and Salesforce Commerce Cloud are vital for embedding its fraud prevention technology directly into merchant operations, simplifying adoption and expanding market reach. These collaborations, particularly with platforms powering millions of businesses, grant Riskified access to a vast network of potential clients, enhancing their ability to protect transactions effectively.

The alliances with payment service providers and gateways, including Fiserv and Checkout.com, are fundamental for integrating fraud prevention seamlessly into the transaction process. This ensures a smooth customer checkout experience, which is critical for optimizing transaction approval rates. In 2024, as online fraud attempts continued to rise, these integrations became even more crucial for maintaining consumer trust.

Riskified's partnership with AWS, as an AWS Accelerate Partner, underpins its ability to offer reliable and scalable AI-powered fraud prevention services capable of handling massive global transaction volumes securely. Furthermore, its presence on the AWS Marketplace streamlines procurement and integration for merchants, accelerating the adoption of advanced fraud detection tools.

Collaborations with financial institutions and issuing banks are essential for enriching transaction data and improving fraud analysis accuracy. These partnerships help distinguish legitimate from fraudulent orders, leading to higher approval rates for good customers. For example, in 2024, the ongoing challenge of e-commerce fraud underscored the importance of these data-sharing alliances.

Strategic alliances with consulting firms like Deloitte are crucial for expanding Riskified's reach, particularly among large enterprises. These partnerships leverage established client relationships and provide the implementation expertise needed to tailor and deploy Riskified's sophisticated fraud prevention solutions effectively across diverse business environments.

Riskified's core activity involves meticulously analyzing the digital identities associated with online transactions. This deep dive into data allows them to differentiate genuine customers from fraudulent actors. By processing vast amounts of information, they build a comprehensive understanding of user behavior.

Leveraging an extensive global network of merchants, Riskified aggregates and analyzes identity-related data. This collaborative approach enhances the accuracy and robustness of their insights, creating a powerful defense against fraud. This network effect is crucial for their effectiveness.

The outcome of this rigorous data analysis is a significant improvement in distinguishing legitimate customers, leading to higher approval rates for online purchases. For instance, in 2024, Riskified's solutions helped merchants approve an additional 1.5% of transactions that might have otherwise been declined due to fraud concerns.

Riskified's key activities center on developing and refining its AI-powered fraud detection and prevention platform. This involves continuous data analysis to identify fraudulent patterns and provide real-time transaction assessments for e-commerce merchants.

The company also focuses on managing and resolving chargeback disputes, leveraging its data and expertise to help merchants recover lost revenue. This includes offering services like Chargeback Guarantee and Dispute Resolve, which are vital for online retailers facing financial losses from fraudulent transactions. In 2023, Riskified helped merchants recover over $12 billion in revenue.

Furthermore, Riskified actively expands its market presence by onboarding new merchants across various industries and geographies, while also diversifying its product suite with solutions like Adaptive Checkout to enhance the customer experience and offer broader risk management capabilities.

Riskified’s core strength lies in its substantial team of highly skilled data scientists, machine learning engineers, and e-commerce risk analysts. This deep bench of expertise is absolutely essential for building, refining, and advancing their sophisticated AI-powered fraud prevention platform.

These professionals are the architects behind the machine learning models that detect and prevent fraudulent transactions in real-time. Their continuous work ensures the platform remains at the cutting edge, adapting to evolving fraud tactics and providing merchants with robust protection.

The insights generated by this team are invaluable, offering merchants a deeper understanding of their risk landscape and enabling more informed decision-making. In 2023, Riskified reported a significant increase in the volume of transactions processed, underscoring the critical role of their data science and analytics capabilities in managing this scale effectively.

Riskified's key resources are its proprietary AI and machine learning models, which are trained on an extensive global transaction data network. This data, processed by a skilled team of data scientists and engineers, fuels the platform's ability to detect and prevent fraud with high accuracy. The company's robust technological infrastructure and a portfolio of intellectual property further solidify its competitive advantage.

Riskified's advanced technology dynamically adjusts the checkout experience, significantly cutting down on instances where legitimate transactions are wrongly flagged as fraudulent. This intelligent adaptation ensures that genuine customers aren't frustrated by overly strict fraud prevention measures, leading to a more seamless and positive interaction.

By minimizing false declines, Riskified directly contributes to a better customer journey, fostering loyalty and repeat business. For example, in 2023, Riskified reported that its clients saw an average of 8% fewer declines for good customers, a crucial metric for e-commerce growth.

Riskified's core value proposition centers on providing merchants with a 100% chargeback guarantee for approved transactions, effectively eliminating fraud losses for those sales. This protection is vital in 2024's evolving e-commerce landscape, where fraud remains a persistent threat. By absorbing the risk of fraudulent activity, Riskified allows businesses to focus on growth and customer experience, rather than the complexities of chargeback management.

The platform significantly boosts merchant revenue by increasing approval rates for legitimate customers, directly combating the issue of false declines. In 2024, many online retailers experienced substantial revenue leakage due to incorrectly flagged good customers, a problem Riskified's AI actively addresses. This leads to a better customer journey and fosters loyalty.

Riskified also tackles policy abuse, such as fraudulent returns, protecting profit margins. Their advanced technology dynamically adjusts the checkout experience, ensuring genuine customers have a seamless interaction. This adaptability empowers businesses to expand globally with confidence, offering diverse payment options and diversifying market presence for increased resilience and revenue growth.

Riskified cultivates a vibrant merchant community through initiatives like its Ascend summits. These gatherings serve as crucial platforms for e-commerce leaders to exchange valuable insights and best practices in combating fraud.

This collaborative environment empowers merchants to collectively strengthen their defenses against fraudulent activities. Such shared learning experiences significantly bolster their confidence and trust in Riskified’s ability to protect their businesses.

Riskified builds strong customer relationships through dedicated account management and performance-based partnerships, directly aligning their success with merchant outcomes. This collaborative approach fosters loyalty and drives tangible results, such as reduced chargebacks. For example, in 2024, Riskified merchants experienced an average 18% decrease in chargeback rates, a testament to the effectiveness of these relationships.

Riskified leverages its corporate website and blog to educate potential clients about e-commerce fraud and the advantages of its AI-driven solutions. This digital presence is crucial for generating leads and building brand recognition within the online retail space.

Through targeted digital marketing campaigns, Riskified aims to attract businesses seeking to reduce chargebacks and improve their customer experience. In 2024, the company continued to emphasize thought leadership content, showcasing how its technology helps merchants navigate evolving fraud patterns.

Riskified utilizes a multi-faceted channel strategy, encompassing direct sales, strategic partnerships, digital marketing, industry events, and public relations. This integrated approach ensures broad market reach and deep engagement with its target audience of e-commerce businesses and financial decision-makers.

In 2024, Riskified's direct sales team continued to secure high-value enterprise accounts, with a notable increase in average contract values. Its partnership ecosystem, including integrations with major e-commerce platforms like Shopify, drove significant new merchant acquisition, accounting for a substantial portion of growth.

The company's digital presence, including its website and blog, serves as a key lead generation tool, supported by targeted marketing campaigns that highlight thought leadership in fraud prevention. Furthermore, participation in industry events and strategic PR efforts, such as recognition on CNBC's World's Top Fintech Companies lists, bolster brand credibility and market visibility.

Online merchants aiming to grow their business by entering new international markets are a crucial customer segment for Riskified. These businesses need to navigate the complexities of cross-border transactions and varying fraud landscapes.

Riskified empowers these expanding businesses by offering robust fraud prevention and chargeback protection across diverse geographies. For instance, in 2024, a significant portion of e-commerce growth is expected to come from emerging markets, where fraud rates can be higher and more unpredictable.

By leveraging Riskified's technology, these merchants can confidently approve more legitimate international orders, thereby boosting sales and customer acquisition in these new territories. This directly supports their global expansion strategies, allowing them to tap into new revenue streams with reduced risk.

Riskified's customer base is primarily large e-commerce enterprises, particularly those in high-value sectors like fashion and travel. These businesses process significant transaction volumes and are acutely aware of the financial drain caused by fraud. For example, in 2024, the global e-commerce market exceeded $6.3 trillion, with these large retailers capturing a substantial share.

A key segment also includes omnichannel retailers who need unified fraud management across online and physical touchpoints. As omnichannel strategies became more prevalent by 2024, the demand for integrated solutions grew. Riskified's ability to provide a consistent view of customer behavior across all channels is a major draw.

Merchants expanding internationally are another vital group, needing to navigate diverse fraud landscapes. With emerging markets driving significant e-commerce growth in 2024, Riskified's cross-border protection is essential for these businesses to confidently approve international orders and capture new revenue streams.

Finally, businesses struggling with high false decline rates are a critical focus. In 2024, the e-commerce fraud prevention market was valued around $3.5 billion, and minimizing these errors directly boosts conversion rates. Riskified's Adaptive Checkout aims to improve customer experience and unlock lost revenue by accurately identifying legitimate customers.

Riskified allocates significant resources to sales and marketing, a crucial element for acquiring and retaining large enterprise clients. These expenses are vital for expanding its market presence and driving revenue growth.

In 2023, Riskified’s sales and marketing expenses amounted to $157.8 million. This substantial investment reflects the company's strategy of direct sales engagement, digital marketing initiatives, and participation in key industry conferences to showcase its fraud prevention solutions.

Riskified's cost structure is dominated by its chargeback guarantee payouts, a direct cost of revenue that impacts profitability. Significant investments are also made in sales and marketing to acquire and retain clients, alongside substantial spending on research and development for AI and machine learning enhancements.

Operational costs, including general and administrative expenses, are managed diligently, with a focus on efficiency. The company also incurs considerable costs related to data acquisition, processing, storage, and the ongoing development of its AI models, all essential for its fraud prevention services.

While Riskified's core revenue comes from transaction fees, they also offer subscription or platform fees for enhanced capabilities. This model is especially relevant for larger enterprise clients seeking advanced fraud prevention tools, specialized analytics, or premium support tiers.

Riskified's revenue model is primarily transaction-based, with its core Chargeback Guarantee service charging merchants a percentage of processed transactions. This model is expanding as Riskified introduces new services like Policy Protect and Account Secure, diversifying its income streams beyond just chargeback prevention.

The company also leverages subscription or platform fees for enterprise clients needing advanced fraud prevention and analytics. This tiered approach allows for scalable revenue generation, catering to businesses of varying sizes and complexities.

Riskified's Dispute Resolve offering, operating on a success-based fee, is a significant revenue driver, directly recovering lost sales for merchants. This aligns Riskified's earnings with client success, as evidenced by their role in blocking over $120 billion in fraudulent transactions in 2023.